Australia unemployment drops to 5.8% as recovery strengthens

Australia’s jobless rate tumbled in February as rising sentiment from a vaccine rollout combined with fiscal and monetary stimulus accelerated the economy’s recovery and returned employment to pre-pandemic levels. Unemployment dropped to 5.8% from a revised 6.3% in January, data from the statistics bureau showed Thursday in Sydney. Employment jumped by 88,700 in February, compared with an expected 30,000 gain. The participation rate was unchanged at 66.1%, in line with expectations. “The strong employment growth this month saw employment rise above 13 million people, and was 4,000 people higher than March 2020,” said Bjorn Jarvis, head of labor statistics at the ABS. The labor market’s strength might cool in the period ahead as the government’s vast wage-subsidy program JobKeeper, designed to keep workers attached to their employers, expires at the end of this month. The government is providing ongoing support to industries like tourism and airlines that are still struggling from closed borders.

The Australian dollar advanced following the data’s release and was trading at 78.23 U.S. cents at 11:44 a.m. in Sydney.Australia is experiencing a V-shaped recovery as the containment of Covid-19 boosts confidence and encourages cashed-up households to spend. That’s prompted firms to accelerate hiring and people to resume job-hunting. The Reserve Bank of Australia said last month it was extending its quantitative easing program by a further A$100 billion ($78 billion) and reiterated that it doesn’t expect to increase interest rates until 2024. It’s trying to keep a lid on a currency, which left unchecked could appreciate further and hurt exports and employment.